Journal Article

Subjective Performance and the Value of Blind Evaluation

Curtis R. Taylor and Huseyin Yildirim

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 78, issue 2, pages 762-794
Published in print April 2011 | ISSN: 0034-6527
Published online February 2011 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1093/restud/rdq005
Subjective Performance and the Value of Blind Evaluation

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  • Game Theory and Bargaining Theory
  • Microeconomics
  • Information, Knowledge, and Uncertainy

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The incentive and project selection effects of agent anonymity are investigated in a setting where an evaluator observes a subjective signal of project quality. Although the evaluator cannot commit ex ante to an acceptance criterion, she decides up front between informed review, where the agent's ability is directly observable, or blind review, where it is not. An ideal acceptance criterion balances the goals of incentive provision and project selection. Relative to this, informed review results in an excessively steep equilibrium acceptance policy: the standard applied to low-ability agents is too stringent and the standard applied to high-ability agents is too lenient. Blind review, in which all types face the same standard, often provides better incentives, but it ignores valuable information for selecting projects. The evaluator prefers a policy of blind (respectively informed) review when the ability distribution puts more weight on high (respectively low) types, the agent's pay-off from acceptance is high (respectively low), or the quality signal is precise (respectively imprecise). Applications discussed include the admissibility of character evidence in criminal trials and academic refereeing.

Keywords: Standards; Fairness; Discrimination; Review policy; C73; D02; D81

Journal Article.  13481 words.  Illustrated.

Subjects: Game Theory and Bargaining Theory ; Microeconomics ; Information, Knowledge, and Uncertainy

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